1300 N. CURSON INVESTORS, LLC, Plaintiff and Appellant, v. CECILIA DRUMEA et al., Defendants and Respondents.
No. B250618
Court of Appeal, Second District, Division Eight, California
Apr. 4, 2014
225 Cal. App. 4th 325
Pircher, Nichols & Meeks and James L. Goldman for Plaintiff and Appellant.
The Salem Law Firm and Edmond E. Salem for Defendants and Respondents.
OPINION
GRIMES, J.—This appeal concerns the amount of rent that may be charged under the Rent Stabilization Ordinance of the City of Los Angeles (
Landlord 1300 N. Curson Investors, LLC (plaintiff), sued former resident manager Cecilia Drumea and her mother, Elena Drumea (defendants), seeking declaratory relief, ejectment and damages. The day before plaintiff purchased
We reverse, finding that plaintiff was entitled to collect $1,552.03 per month and the notice of rent increase was valid because plaintiff correctly calculated the permissible rent increase under the regulations promulgated by the City of Los Angeles Rent Adjustment Commission (Commission), which issues policies, rules and regulations to effectuate the purposes of the Ordinance. The Commission Regulations and Guidelines, regulation 925.03 provides “if the resident manager was already a tenant in the unit before being appointed resident manager, the rent charged to the resident manager upon termination of managerial services shall not exceed the rent the tenant had already been paying plus annual adjustments authorized under the [Ordinance].” There was no dispute that plaintiff correctly calculated the annual adjustments authorized under the Ordinance for each year Cecilia served as resident manager.
Pursuant to the parties’ stipulation for entry of judgment, plaintiff is entitled to collect $1,552.03 per month beginning the first month following the month in which this decision becomes final, and plaintiff may not recover damages for the difference between that amount and the $850 that defendants agreed to pay during the pendency of this appeal. We find the stipulation for entry of judgment implicitly establishes that plaintiff is not entitled to ejectment unless and until defendants fail to tender $1,552.03 when it becomes due, at which time plaintiff must initiate unlawful detainer proceedings in conformance with all applicable laws in order to evict defendants.
BACKGROUND
The following are the pertinent facts to which the parties agreed in their stipulation for entry of judgment. Plaintiff purchased the apartment building located at 1300 N. Curson Avenue in Los Angeles, on July 1, 2011. Defendants had lived in a unit in that building since December 15, 1992.
Before Cecilia became the resident manager, defendants’ rent was $850 per month, under a lease dated December 13, 1992. When Cecilia served as resident manager she did not pay rent; rather, she provided managerial services in lieu of rent. While Cecilia occupied the unit rent free, the previous owners did not serve defendants with notices of the rent increases that they would have been required to serve if they were collecting rent from defendants, nor with the annual registration statements issued by the Los Angeles Housing and Community Investment Department (Department). However, the previous owners mailed the annual registration statements to Cecilia, and it was her duty to serve these statements on the other tenants in her capacity as resident manager.
On December 31, 2011, defendants were served with a notice of rent increase, charging rent of $1,552.03 per month, commencing on March 1, 2012. Defendants did not comply with the notice, claiming it was invalid, and instead tendered rent of $850 on several occasions. Their tenders were rejected by plaintiff. On March 8, 2012, plaintiff served defendants with a three-day notice to quit or pay rent demanding rent of $1,552.03. Defendants did not pay the amount demanded in the notice. Instead, they have paid $850 per month during the pendency of this dispute pursuant to agreements preserving plaintiff‘s claims and defendants’ claims and defenses.
Defendants submitted a complaint to the Department. After receiving correspondence from the parties, the Department stated its view that the allowable increase for the period of July 1, 2011, through June 30, 2012, was 3 percent, and that the proposed increase to $1,552.03 from $850 exceeded this allowable increase. In September 2012, the Department closed defendants’ case because plaintiff had filed this lawsuit on May 29, 2012.
On January 9, 2013, plaintiff filed a motion for summary judgment or summary adjudication, seeking a declaration that it was permitted to raise defendants’ rent to $1,552.03 per month. Defendants opposed the motion on the ground that their rent reverted to the $850 per month they had paid before Cecilia became resident manager because the former owners did not serve them with any notices of allowable annual rent increases. Defendants also contended that the rent increase was cumulative and retroactive in violation of the Ordinance.
The trial court entered judgment for defendants in accordance with the stipulation. Plaintiff filed a timely notice of appeal.
DISCUSSION
We review de novo pure questions of law based on undisputed facts, including questions of statutory construction. (Weingarten Realty Investors v. Chiang (2012) 212 Cal.App.4th 163, 167-168.)
The canons of statutory construction apply to local ordinances. (City of San Diego v. Rider (1996) 47 Cal.App.4th 1473, 1490.) “[W]e begin with the fundamental rule that a court should ascertain the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, the court turns first to the words themselves for the answer. We are required to give effect to statutes according to the usual, ordinary import of the language employed in framing them. Moreover, the various parts of a statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole.” (Rodriguez v. Solis (1991) 1 Cal.App.4th 495, 505.) When provisions cannot be harmonized, particular or specific provisions will generally take precedence over conflicting general provisions. (
In 1978, the Los Angeles City Council enacted the Ordinance to regulate rent increases caused by a housing shortage. (Klarfeld v. Berg (1981) 29 Cal.3d 893, 895-896.) The legislative purposes of the Ordinance are set forth in Los Angeles Municipal Code
The Ordinance provides many tenant protections. Some of the significant tenant protections are those limiting the amount of annual rent increases,1 providing for a reduction in rent when there has been a reduction in services, prohibiting eviction of a tenant except for good cause, and requiring landlords to provide relocation assistance in specified circumstances. (
The Ordinance prohibits a landlord from charging cumulative or retroactive rent increases. (See
The Ordinance also specifically vests the Commission with authority to “promulgate regulations to determine the appropriate maximum adjusted rent on a rental unit when the tenant of a rental unit was, but no longer is, the resident manager, and when a rental unit, formerly occupied by a resident manager, is offered for rent to another person.” (
The Commission issued special regulations to determine the maximum allowable rent increase that a landlord may charge a former resident manager who continues to occupy a unit after her services have terminated. Commission Regulations and Guidelines, regulation 925.03 provides, “if the resident manager was already a tenant in the unit before being appointed resident manager, the rent charged to the resident manager upon termination of managerial services shall not exceed the rent the tenant had already been paying plus annual adjustments authorized under the [Ordinance].” If a manager was not a tenant before being appointed resident manager, the rent upon termination of managerial services is either what the landlord and manager contracted for, or “shall be the average of the rents of the comparable occupied units in the building.” (Com. Regs. & Guidelines, reg. 925.01.)
Harmonizing these provisions, it is clear that although resident managers are afforded the many protections of the Ordinance, they are treated differently than other tenants insofar as the allowable rent increase a landlord may collect when they continue to occupy a unit after their management services are terminated. Where other tenants may not be charged a cumulative rent increase, a former manager tenant who already occupied the unit before being appointed resident manager may be charged the rent the tenant had
Defendants claim that their rent may not be increased because the former owners did not serve them with the annual registration statements and notices of rent increases during the time that they did not pay rent. We find it would be impractical to require landlords to serve annual registration statements and notices of rent increases on resident managers who do not pay rent. No express provision of the Ordinance pertaining to rent increases for a former manager who was previously a tenant provides that the landlord must have given notices of “what the rent increase would have been if you were paying rent.” Nothing in the Ordinance suggests an intent to require a landlord to give notice of theoretical rent increases to a manager who does not pay any rent. To the contrary, the Ordinance expressly provides how much rent may be increased for a unit occupied by a former resident manager and says nothing about the service of notices during the time the resident manager occupied the unit without paying rent. Moreover, the Commission Regulations and Guidelines, regulation 925.04 requires the landlord to make available to the former resident manager “the rent records used in calculation of the rent of the unit upon termination of the managerial services.” This is the way the former resident manager is notified of the basis for the increase in rent over the amount she paid as a tenant before serving as manager.
In contrast to the resident manager who pays no rent, when a manager pays partial rent, the Commission Regulations and Guidelines, regulation 924.01 specifies that “only the partial rent payments shall be subject to the annual adjustments authorized under the [Ordinance] pursuant to [Los Angeles Municipal Code section] 151.06” and that the “landlord must comply with the notice requirements of . . . Civil Code [s]ection 827 prior to any . . . increase in the rent.” It logically follows from the requirement that the landlord must give notice of increases in partial rent payments that the landlord has no obligation to give notice of what the increase would have been if the manager were paying the full rental value of the unit.
Commission Regulations and Guidelines, regulation 925.01 provides that the rent of a former resident manager who continues to occupy the unit, who was not a tenant of the unit before serving as manager, may be set at the average rent of comparable occupied units in the building. Since the Ordinance specifies the maximum annual rent increase for every rental unit, the
We also find the Ordinance does not require landlords to serve annual registration statements on resident managers who pay no rent. The provisions of the Ordinance requiring annual registration statements make the “demand” for rent contingent upon issuing them. (See
We conclude that a former resident manager who was already a tenant in the unit before being appointed resident manager may be charged rent upon termination of managerial services in the amount of the rent the former manager had been paying as a tenant, plus the annual adjustments authorized under the Ordinance, and the landlord has no obligation to serve annual registration statements or notices of rent increases during the period that the former manager occupied the unit rent free. Therefore, the judgment must be reversed, and plaintiff is entitled to an order granting summary adjudication in its favor on its cause of action for declaratory relief. In this case, however, that does not mean that defendants are required to pay the difference in rent, or suffer ejectment for nonpayment of rent during the pendency of this case, because in the stipulation for entry of judgment, the parties agreed that plaintiff would not seek damages, and that rent in the amount of $1,552.03 would be due beginning the first month after the month in which this decision becomes final. Plaintiff will not be entitled to ejectment for nonpayment of rent unless and until defendants fail to tender $1,552.03 when it becomes due, at which time plaintiff must initiate unlawful detainer proceedings in conformance with all applicable laws in order to evict defendants.
DISPOSITION
The judgment is reversed, and the matter is remanded to the trial court. The trial court is ordered to enter an order granting summary adjudication on
Bigelow, P. J., and Flier, J., concurred.